John Sanford

Insurance is a necessary evil – we buy it, hoping we’ll never need it. After all, it’s a hedge against catastrophe.

The sheer cost of replacing a home with custom finishes, and the fact that high-end homes may contain priceless works of art, expensive vehicles and irreplaceable values, makes the process of insuring luxury homes far different from insuring other homes.

Many homeowner insurance policies place a low cap on coverage for jewelry. So, the specialty high-end coverage that the luxury homeowner purchases needs to be broad in scope. This may mean adding special coverage.

Because of this, some homeowners end up with four or five different policies, according to Market Watch’s Christopher Noble. Subsequently, owners of homes that are valued at $1 million or more can pay from $5,000 to $50,000 a year for insurance.

Fortunately, there are ways to save money on your homeowners’ insurance coverage. Let’s take a look at five of these.

1. Stick with the same insurer

If you own more than one home, ensure that both are covered by the same insurer and ask for all the discounts offered. Also, move your auto insurance to the same company for additional discounts.

2. Raise your Deductible

As we’ve all learned with America’s health insurance program the deductible you choose has a large impact on the premium you’ll pay. How much? Check out this ValuePenguin.com chart:

The blue bars represent the premium amount. As you can see, raising the deductible from $1,000 to $10,000 will save $359. Even a more moderate hike, such as from $1,000 to $4,000 nets a more than $200 savings.

3. Security

If the home lacks certain safety features, such as alarms, fire sprinkler systems and dead bolt locks, install them. Each safety system typically qualifies for a discount so speak with your agent to determine which he or she recommends.

An example of this is the Chubb Group of Insurance Cos. “It discounts premiums by up to 25% for homes with sprinkler and alarm systems,” according to marketwatch.com.

4. Sensors

Some insurance companies offer discounts if the home features certain trouble detectors. These might include temperature sensors that detect a problem with the HVAC system and leak detectors with alarms that sound when water touches them.

“Particularly if (the systems) are routed back to a service (such as the local fire or police department), well that’s more expensive, so the discount is higher,” claims Loretta Worters of the Insurance Information Institute

5. Take advantage of your age

Last year, Palm Beach, with a median resident age of nearly 55 years old, was ranked the third richest city in the U.S., according to Inman.com. Some insurers reward older American homeowners with discounts, so those affluent homeowners in Palm Beach, and other wealthy cities, may be eligible for a break on their homeowner policies.

Additional savings the affluent homeowner should inquire about:

Claim-free – if you’ve gone a long period of time without submitting a claim, you may be eligible for a discount on your premium.

New roof? – Call your insurer to find out if the material used in the new roof is disaster-proof. It may save you money.

Retirement – Insurance companies consider retirees’ home’s low-risk. After all, they’re home most of the time (or so the assumption goes) so they’re quicker to respond to a house fire and better able to thwart a home break-in. If you are a member of AARP, check out their insurance program.

Green home coverage – While this discount isn’t common, one or two companies offer discounts on LEED-certified homes.

Do your research

Shop carefully for home insurance. “Some of the companies that have the most discounts start with the highest price,” Bob Hunter, director of insurance for the Consumer Federation of America tells banrate.com.

The final price you’ll pay should be your priority, not the number of discounts you’ll get.